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Marquette Law grad gets $174K in student loans wiped out through to Public Service Loan Forgiveness program

The Public Service Loan Forgiveness program has been around for 15 years, but up until this past year, many government and non-profit employees struggled to get approved.
Marquette University
Posted at 5:14 PM, Sep 01, 2022

MILWAUKEE — One week after President Joe Biden announced his student loan forgiveness plan, the deadline is fast-approaching for a far lesser known program that’s cancelling even more debt for borrowers who are public services employees. It’s now easier to get approval for the program, but you must apply within the next two months.

The Public Service Loan Forgiveness program has been around for 15 years, but up until this past year, many government and non-profit employees struggled to get approved because of strict requirements. Now that those requirements have been relaxed through a temporary waiver, thousands of people who have made at least ten years of payments are getting their student loans wiped out.

There are all sorts of public service employees in Wisconsin, from firefighters and police to teachers and social workers. Many of whom are left with mounting student loan debt. But as Danica Zawieja found out, their remaining balance can be cleared through the Public Service Loan Forgiveness program known as PSLF.

“It allows me to keep doing the job that I really love to do,” she said.

Zawieja says she graduated from Marquette University Law School in 2010 with $116,000 in federal student loan debt. She says that amount continued to climb up to $174,000 this year due to interest after making income-based payments while working as an attorney for the Menominee Tribe of Wisconsin. Her balance of $174,000 was fully wiped out this year when she received PSLF approval.

"For me, it really is a path to home ownership,” she said.

Up until the temporary waiver was available, Zawieja says it was nearly impossible for her and many others to qualify for the forgiveness.

"The automatic debit {payment} would be one cent less, so then it didn't count as a full payment,” she explained.

According to the U.S. Department of Education, there are 172,000 public service workers with federal student loan debt in Wisconsin, but prior to the PSLF waiver, fewer than 3,000 qualified to have their debt cancelled.

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Emma Crawford with UW-Madison’s financial aid advising office says that’s no longer the case.

"We're seeing literally billions of dollars in loan forgiveness as a result of this temporary waiver,” she said.

Crawford says the waiver allows public service employees to consolidate different types of federal loans into what’s called a Direct Loan without resetting the clock on ten years of payments. Only federal Direct Loans are canceled through this program.

"It really makes it easier for past payments to now count, which now has allowed so many borrowers to backtrack and get credit for PSLF qualifying payments that would not ordinarily count,” Crawford said.

In order to get approval, applicants need to have made at least 120 qualifying student loan payments. Crawford says those who qualify get the remaining amount of their federal student debt canceled.

"As it stands today, there's no cap on the amount of forgiveness, so whether a borrower has $2,000 in federal student loans remaining or they have hundreds of thousands of dollars,” she said.

While Wisconsin is set to be one of just five states to tax the latest round of federal student loan relief President Biden announced last week, the Wisconsin Department of Revenue says that is not the case for those who receive Public Student Loan Forgiveness relief.

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